Michael, 77, has lived in the Southern Highlands of New South Wales for more than two decades. After managing an accountancy practice in Wollongong, he and his wife retired to Bowral 23 years ago, drawn by the pace of life and the strong sense of community.
Like many Australians of his generation, Michael is a self-funded retiree. His income was largely supported by dividends from Australian bank shares – a strategy that had served him well for years. But during the COVID-19 pandemic, those dividends were sharply reduced, placing unexpected pressure on his cash flow.
Adding to the strain was the loss of his wife. The family home, valued at more than $3 million, was in her name and still carried a modest mortgage of around $70,000. Under her will, the property was to be transferred to Michael, with the understanding it would ultimately be bequeathed to his stepson.
Despite being a long-standing customer, Michael was surprised to discover his bank was unwilling to transfer the existing loan into his name. No alternative solutions were offered, leaving him facing the very real possibility that he might be forced to sell the home simply to clear a relatively small debt.
For Michael, the idea of selling was deeply unsettling – not only because of the upheaval involved, but because it would undermine long-standing family intentions.
A reverse mortgage provided a practical solution. The loan was used to pay out the remaining bank mortgage, with additional funds set aside as a contingency should Michael need to supplement his income during quieter periods in the market.
Importantly, the arrangement gave Michael flexibility. If his share portfolio recovered and dividends returned to previous levels, he could reduce or repay the debt at a time of his choosing – without pressure.
The outcome brought enormous relief. Michael was able to remain in his home, honour his late wife’s wishes, and regain a sense of financial control during a period of uncertainty.
For him, it wasn’t about borrowing for lifestyle extras – it was about stability, dignity and staying put.
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